Price of domestic gas soars on Nepal black market

nepalKATHMANDU: Capitalising on the situation of inadequate supply of liquefied petroleum gas from India and weak market monitoring in the country, LPG bottling plants have been supplying full cylinders of cooking gas in the black market.

Cylinders of various brands of LPG that are fully refilled are easily available in the black market though Nepal Oil Corporation has barred bottling plants from dispatching full cylinders in the market.

Along with the scarcity of the commodity, NOC had instructed bottling plants in October to dispatch only half-filled cylinders in the market so that more number of people could avail LPG.

But some consumers have a different story to tell.

Sushan Lama of Koteshwor bought a full cylinder of cooking gas in the black market last week at a price of Rs 5,000, along with the cylinder.

During normal times, a 14.2 kg cylinder of cooking gas costs around Rs 3,500 only.

Binit Sharma of Kupondole, Lalitpur, also has a similar experience to share. “Full cylinders of cooking gas of local brands are easily available in the market but we have to pay more and need to purchase new cylinders,” said Sharma.

According to the Gas Dealers Federation Nepal, bottling plants have not been dispatching refilled cylinders on a regular basis.

“Bottling plants are dispatching a very limited number of cylinders to the dealers only every two to three days,” said Chandra Bahadur Thapa, general secretary of GDFN, adding, “Sometimes they cite shortage of diesel to ferry refilled cylinders to the dealers, and at times they say it is due to problems created by the locals.”

A majority of the bottling plants are located in Chitwan and Dhading districts but a large number of consumers reside in the Kathmandu Valley.

Gas bottlers have been directly supplying full cylinders of LPG to big consumers, such as industries and star hotels, and dispatch a limited number of half-filled cylinders to dealers to be distributed to households.

“Around 11,000 tonnes of cooking gas was imported from India in January, but the shortage has still persisted like in the earlier months,” said Thapa.

The quantity imported in January is equal to the total quantity imported during October to December.

Gas bottlers, meanwhile, have been complaining to NOC regarding the high transportation cost, and also the high refilling cost, as the bottling plants need to operate for a longer period of time while refilling more cylinders with half the quantity.

NOC has slashed the dealer commission to Rs 16 on the sale of each cylinder as against Rs 32 being paid during normal times. It has also asked the bottlers to continue supplying only half-filled cylinders until the supply situation normalises.

However, bottling plants have been seeking compensation for the increased overhead costs due to the half-cylinder refilling system.

Sushil Bhattarai, acting deputy managing director of NOC, said the half-cylinder system would continue till supply became normal.

“If we allow bottling plants to refill full cylinders, supply will automatically drop by 50 per cent and that could create panic among people,” he said.

Bhattarai said he was not aware of bottling plants supplying full cylinders of LPG in the black market.

“We will suspend the product delivery order of the concerned firm involved in irregularities and the firm will not be able to import LPG for a certain period of time,” he said.

NOC has said that only half the quantity of LPG that is supplied during normal times is being supplied at present by India. The country’s total monthly demand of LPG hovers around 30,000 tonnes.

Kush Prasad Mally, vice president of Nepal LP Gas Industry Association, said the association had followed the system set by NOC due to low supply caused by the border blockade with an intention to supply cooking fuel to more people.

“We have already requested the supply minister, secretary and the Department of Commerce and Supply Management to cancel the transitional provision set by NOC,” Mally said.

“We cannot afford the high transportation and operational costs involved in filling and supplying half-filled cylinders.”

He also refuted claims that bottling plants had been supplying full cylinders in the black market.

In fact, some bottling plants that have less number of cylinders are facing difficulties due to half-cylinder provision because they need more cylinders to distribute the quantity they have imported, as per Mally. – From The HimalayanTimes

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